Eurazeo / 2018 Registration document

GOVERNANCE Risk management, internal control and main risk factors

Risks relating to competition 3.4.2.4 with other market players Identification of risks

management of its investments or with its investment partners in the case of third-party management activities. Similarly, the departure, prolonged absence or loss of confidence of key people in the management team of one of our investments, for whatever reason, could have an impact on operations and the implementation of the investment's strategy. The existence of a shared investment vision with management is central to Eurazeo's investment criteria. During the development phase, Eurazeo's teams and the management teams of each investment work in a completely open manner to set out a clear vision of the goals to be achieved and action to be taken in the short-, medium- and long-term. The management of the Company's investments has played – and continues to play – an important role in adapting to economic conditions. Risk management To minimize this risk, Eurazeo makes the alignment of the interests of investment shareholders, teams and management a key factor in promoting the continuity of management teams and value creation, notably through co-investment mechanisms and the progressive vesting of rights under instruments, such as performance shares. The Company also places emphasis on its close, regular and strong relations with management teams in its investments and the preparation of the succession of key people. Finally, close attention is paid to the drafting of key people clauses in the co-investment fund rules. Risks relating to conflicts of interest 3.4.2.6 Identification of risks Eurazeo is likely to face situations of conflict of interest due to its wide range of investment activities. Its model means that at certain points in an investment’s portfolio lifecycle, its own interests could potentially conflict with those of investment partners. Similarly, the diversification of Eurazeo’s investment strategies (particularly with the acquisition of Idinvest) increases the risk that the interests of certain businesses may diverge: for example, venture capital and private debt activities for a given investment project. Risk management To ensure the interests of investment partners always take precedence, Eurazeo has drafted a conflict of interest management policy founded on three pillars: prevention, detection and management of conflicts of interest. The risks associated with potential or proven conflicts of interest have been mapped and a risk prevention and management procedure defined for each risk. The key components of this procedure are: transparency with investment partners, independence of the Eurazeo subsidiary management company teams, strict rules defining bans on information sharing between teams, adaptation of governance principles for managed funds.

The Company operates in a competitive market due to the existence of a large number of private equity players. Strong competition for the most sought after assets, in a context of plentiful capital, can lead to very high acquisition prices or the retention of a significant cash position negatively impacting the Company's performance. Competition can also result in Eurazeo spending considerable time and expense on investment candidates where Eurazeo's proposal is not selected or see the loss of attractive opportunities. By opening an office in New York in 2016 (Eurazeo North America) and pursuing the goal of direct investment in U.S. companies, Eurazeo is now active in the number one private equity market in the world which has a large number of players. Risk management By structuring its activity around eight investment strategies focusing investment on growth companies with positive underlying economic trends, Eurazeo is able to identify and examine opportunities, and better understand vendors at a very early stage This approach of identifying non-brokered deals, offers a competitive edge in the sales process and can reduce exposure to competition inherent to brokered deals. Eurazeo has formed a team of American and French investors as part of the roll-out of its activities in the United States (Capital and Brands divisions). This team is supported by senior advisors with considerable experience in the industrial sector and an extensive business network in the United States, valuable in understanding the specific characteristics of the American private equity market. The strategic partnership with Rhône offers Eurazeo a further opportunity to extend its transatlantic scope of action. Finally, with the three new businesses contributed by Idinvest in 2018 (venture capital, private debt and private funds), Idinvest enables Eurazeo to expand its business networks and knowledge of certain strategic sectors. Risks relating to dependence on key 3.4.2.5 personnel Identification of risks Eurazeo's capacity to seize the right investment opportunities, to optimize the engineering of its acquisitions and to capitalize on the value-creation potential of its investments relies on its reputation, its networks, the skill and expertise of its Executive Board members and its Investment Officers. As such, the departure of one or several of these key people could have an adverse impact on Eurazeo's business and organization. Such a departure could alter not only the deal flow and projects underway at the time, but could also affect the management of Eurazeo's teams and the Company's relations with the

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Eurazeo

2018 Registration Document